FTX Sues Ex-Hillary Clinton Aide over $700M in 'Misappropriated Funds'

FTX is seeking to claw back some $700 million from a former aide to Hillary Clinton-turned Hollywood super agent who was allegedly showered with cash by disgraced fallen crypto mogul Sam Bankman-Fried.

The bankrupt cryptocurrency exchange took legal action on Thursday against Michael Kives, who was an assistant to then-Sen. Hillary Clinton, and his company, K5 Global, and firm co-founder Bryan Baum.

According to court papers filed in bankruptcy court in Delaware, Bankman-Fried authorized the transfer of $700 million to K5 entities in 2022, and he leaned on K5’s celebrity and business connections in his effort to obtain rescue financing in the days before FTX went bankrupt in November 2022.

Kives stood to lose hundreds of millions of dollars as a result of K5 Global's business relationship with FTX's now-defunct investment arm, Alameda Research.

The fallen crypto mogul was known to cultivate ties with the wealthy and powerful, including Bill and Hillary Clinton.

Bankman-Fried brushed off FTX employees’ concerns that K5 was "trying to nickel and dime" or "scam" FTX, continuing to make investments in a quest to burnish his own political and social influence, according to the complaint.

FTX, which is currently controlled by court-appointed receivership, alleged in court papers that Bankman-Fried authorized investments in K5 projects that enriched Kives and Baum with no payoff for FTX or its customers, who were footing the bill.

The complaint alleges that a shell company controlled by Bankman-Fried used $214 million in FTX funds to buy a minority stake in 818 Tequila, the spirits brand owned by Kendall Jenner.

At the time of the ill-fated investment, 818 Tequila was worth just $2.94 million, according to SEC filings cited in the lawsuit.

Since filing for bankruptcy, FTX's new leadership has recovered more than $7 billion in assets that can be used to repay customers whose funds were frozen when the crypto exchange collapsed.

FTX has also filed lawsuits over its pre-bankruptcy investment in the stock platform Embed and its payments to Genesis Global Capital, the bankrupt lending arm of crypto firm Genesis.

(Source: New York Post)